Britain can design guns it struggles to manufacture

Has Britain lost the ability to design a new gun?

No. The design knowledge remains, but production facilities and manufacturing capacity are the weak link.

Britain retains capable gun-design teams and the research expertise needed to develop new weapons. Manufacturing capacity is the weakness identified here, even while some new facilities are being built. Funding research without following it with production orders can preserve the ability to design a gun while leaving the country unable to manufacture it readily. The distinction is between retaining engineering knowledge and maintaining the factories that turn that knowledge into equipment.